City Developments Q4 profit down 54.7%
Net profit for the fourth quarter was at S$77.9 million, compared with the restated net profit of S$171.9 million a year ago.
Property developer City Developments Limited (CDL) posted a 54.7% plunge in net profit for its fourth quarter, due to impairment losses in hotels and development projects.
Net profit for the fourth quarter was at S$77.9 million, compared with the restated net profit of S$171.9 million a year ago. Earnings per share (EPS) for the quarter was at 7.9 Singapore cents, lower compared to 18.2 Singapore cents a year ago.
Revenue for the fourth quarter was at S$788.3 million, 40.6% lower compared to S$1.3 billion a year ago.
For the full financial year, net profit rose by 6.7% compared to a year ago to S$557.3 million, while revenue rose 10.3% from a year ago to S$4.2 billion.
In addition to the final ordinary dividend of 8.0 Singapore cents per share, the board is recommending a special final ordinary dividend of 6.0 Singapore cents per share. Adding the special interim ordinary dividend of 6.0 Singapore cents per share paid in September last year, total dividends for the financial year is at 20.0 Singapore cents apiece.
Commenting on the results, CDL’s executive chairman Kwek Leng Beng said the group has achieved a record revenue of more than S$4 billion for the financial year of 2018 ‘in spite of the challenging market conditions’.
‘We are confident that when the global issues are stabilized, Singapore is well-poised to recover given its strong fundamentals,’ said Mr Kwek, adding that the residential property market sentiments should thereby improve with pent-up demand.
The group will continue to strengthen its foothold in Singapore while it looks abroad to diversify its growth and manage its risk, he added.
Property development segment the lead profit contributor
The group’s property development segment continued to be the lead contributor as it contributed to 71% of pre-tax profits for the financial year of 2018. The strong performance was supported by several local and overseas projects.
In Singapore, properties such as Gramercy Park and The Tapestry provided contributions while profit from overseas came from properties such as the Hong Leong City Center in Suzhou, China and Park Court Aoyama The Tower in Tokyo, Japan.
Excluding the S$94.1 million of impairment losses for hotels and the S$20.1 million of allowance for foreseeable losses for two small-scale development projects in Central London which potentially may be leased out, as well as a gain from the partial divestment of the group’s interest in two Chongqing projects in 2017, CDL said net profit for the quarter actually rose by 17.0%.
As at the end of last year, the group’s balance sheet continued to remain healthy with cash reserves of S$2.5 billion.
Net gearing ratio, after the full settlement of its land tenders and acquisitions on the fourth quarter of last year, was at 31%. The net gearing ratio excludes any revaluation surpluses from investment properties.
CDL’s share price which opened lower on Thursday at S$9.42 from the previous closing price of S$9.53, clawed back its losses by noon as it gained S$0.01, or 0.10%, to S$9.54.
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